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Stocks finished mostly lower last week, breaking a string of seven consecutive weekly gains since the end of 2012. Big-cap stocks proved the exception, ending the holiday-shortened week with a diminutive gain. But a bounce of nearly 1% Friday wasn't enough to undo the damage from a midweek drop in equity prices of nearly 2%.

The market reached a five-year high Tuesday, and was on track to keep climbing before the minutes of the latest meeting of the Federal Reserve Open Market Committee were released, revealing that the Fed's monetary easing might end sooner than expected.

The Dow picked up 0.1%, or 19 points, to 14,000.57 on the week, and now stands just 1.2% below its all-time record close of 14,164.53, set in 2007. The Standard & Poor's 500 index declined 0.3%, or four points, to 1515.60. The Nasdaq Composite lost 1%, or 30, to 3161.82.

WEDNESDAY'S DROP was an excuse to take profits after this year's furious rally, says John Wilson, a Raymond James managing director. With the market up so much and many investors looking for a reason to sell, the FOMC provided it, he says. It was "just enough to scare people," but the market's underlying technical factors remain bullish, Wilson adds. More on that below.

Not everyone is worried about the possibility that the Fed will stop buying bonds and depressing interest rates. "In the long run, it's a good thing to get the Fed out of the market," says Paul Nolte, a portfolio manager with Dearborn Partners. "I'm not concerned [about the removal of stimulus]. It's probably a good thing…and means the patient can stand up on its own."

What rising interest rates will mean for stocks could become apparent later this year. Historically, a tightening of monetary policy hasn't been good for the equity market, but given that bond yields are unsustainably low, a rate rise likely will be more painful for bondholders than shareholders.

Wednesday's stock-market stumble was the first big scare of 2013, but many fund managers and individual investors remain underweight equities and are hoping for a sizable correction to justify jumping in now, as they missed the 6% rise this year.

Hedge-fund managers, for example, continue to underperform, up only 3% this year, according to Goldman Sachs, even as they have been increasing their equity exposure to levels last seen in the first quarter of 2007.

The bears have to answer this question: If Wednesday's drop is an omen of something worse than a typical stock-market correction after a huge and rapid run-up, why is gold down 5% this year, and looking to go lower? If people were really panicked, gold would be rising.

THE CLOSER YOU GET to the top of the mountain, the stronger the urge to look down. Despite last week's big downdraft, both the Dow and the S&P 500 indexes remain just below their all-time highs, set back in 2007. After January's market jump of 6%, many expected those old highs would be taken out relatively soon. Yet there's a great deal of investor anxiety, especially lately, about how overstretched the stock market is—or isn't.

Past history isn't a guide to the future, but knowing where you've been can still be helpful in guessing where you're going. Given last week's stock decline, and the broad market's inability so far in February to overtake the highs following a euphoric January, this is a good time to compare the stock market's vital technical signs to the zenith five-and-one-quarter years ago (see table nearby).

Chris Verrone, head of technical analysis for Strategas Research Partners, an independent research outfit in New York, has put together a table of compared values—let's call it the market's health chart. From a technical point of view, equities seem to be on firmer footing today than in the lead-up to the October 2007 top. "What stands out," he says, "is how much healthier the underlying market factors are now versus 2007."

In particular, a strong bullish-trend indication is that 87% of stocks in the S&P 500 index are above their 200-day moving average, compared with just 58% on Oct. 11, 2007, when the index hit an intraday all-time high of 1576.

Additionally, other stock groups—like the small-cap, financial and transportation sectors—have seen their respective indexes make new record highs recently, another supportive indicator. "There aren't the divergences [between sector groups] there were in 2007, which would be concerning," Verrone says.

Finally, the credit market isn't weakening, which happened just before the old highs were reached. Throughout 2007 the spreads were widening between the yield of a typical triple-B-rated corporate bond and the 10-year Treasury bond, indicating the bond market wasn't a believer in the stock-market high, he says. Now those same spreads have been falling, "so the credit market isn't flashing signs of stress," he says.

Investors can't rule out a painful correction, given Washington's dithering about sequestration, or mandatory—and painful—budget cuts. But it is comforting to know that the health chart suggests the rally remains robust.

Taylor, nicknamed "the Grizz" for his hard-driving negotiating style, created a well-publicized contretemps with the French government and the country's organized labor forces last week, and may have coined a catch phrase for Corporate America.

After talks with the French government and unions about buying a failing Goodyear Tire & Rubber plant in France, Taylor wrote in a letter, among other incendiary statements, "How stupid do you think we are?" It was a public smackdown of French labor culture as overpaid and underworked.

That's not exactly a new criticism, but the hyperbole hit home because the country's notoriously inflexible labor rules haven't helped a national economy that isn't growing. Last week, the Markit preliminary French composite purchasing managers' index weakened to 42.3 in February from 42.7 in January.

The media kerfuffle was entertaining, but investors who sidestep the war of words Tuesday and concentrate on Titan's (ticker: TWI) fundamentals might see a stock that remains relatively inexpensive and will continue do well if global growth improves.

Friday, shares of Titan, which makes giant tires for oversized dump trucks, farm vehicles and the like, closed at $25.81. While it's been on a tear, along with the market, from a low of $18 last fall, the stock remains down from a 52-week high of $30.

As Barron's noted in a bullish piece last summer, Titan will benefit from rising agricultural-commodities prices, falling rubber costs, new products and acquisitions. ("Nice Wheels, Lovely Ride," July 9, 2012). The picture hasn't changed since then.

Things have been looking up for America's farmers for a while now, and as with agro-machinery maker
John DeereDE -1.0382575330098183%Deere & Co.U.S.: NYSEUSD87.69
-0.92-1.0382575330098183%
/Date(1427835869649-0500)/
Volume (Delayed 15m)
:
2672144AFTER HOURSUSD88.0718
0.3817999999999980.4353974227391949%
Volume (Delayed 15m)
:
32730
P/E Ratio
10.97496871088861Market Cap
30082740961.9116
Dividend Yield
2.7369141293191928% Rev. per Employee
583792More quote details and news »DEinYour ValueYour ChangeShort position
(DE), one of Titan's biggest customers, Titan does well if farmers do. Some two-thirds of revenue and 80% of profits come from agricultural wheels and tires.

On various valuation metrics, Titan's shares don't look especially stretched after the recent run-up. Both the forward and trailing price-to-earnings ratios are less than the company's historic median level. Titan trades at less than 10 times consensus earnings estimates of $2.69 a share this year.

At 6.2 times, the firm's ratio of enterprise value (market capitalization plus net debt) to earnings before interest, taxes, depreciation, and amortization (Ebitda) is significantly lower than the long-term median of 12.4 times, according to Thomson Reuters.

Analyst earnings estimates for 2013 have been coming down, from $2.94 last summer to $2.69 now. Yet the company recently said it expects to increase market share in the Americas this year in the farming sector, and that Europe is the one big negative worldwide. Titan has a goal of $4 billion to $4.5 billion in sales before 2015, more than double expected sales of $1.8 billion to $1.9 billion last year.

Robert Becker, director of research at Keely Asset Management, likes Titan management's operational moves, such as expanding in Brazil. It is improving plant efficiencies to cut expenses, and has impressively low selling, general, and administrative (SG&A) costs, he adds. Keely owns a stake in Titan, and he notes that "farmers are loaded with cash."